Thoughts on Mary Meeker’s Internet Trends in 2014

It is that time of year when esteemed VC and Internet Analyst Mary Meeker publishes her Internet trends and every blogger comments on them. I was going to skip commenting this year as I am not a big fan of prognostication, I do not feel anyone can predict the future, but her ideas are thought provoking so I did want to highlight the ones that may be interesting to my readers. She also points out many trends and data points that are useful to all tech companies (the full presentation is embedded below):

Internet usage is growing fastest in markets that are difficult to monetize. Overall Internet growth is less than ten percent, and most of the growth is in emerging markets, e.g., India, Nigeria, Indonesia. Companies that can figure out a way to monetize in these markets have great opportunities.

Smartphone growth is following the same pattern as Internet growth. While smart phone growth is stronger than Internet growth, more than 20% year over year, the fastest growth is also in emerging markets.

Tablets are seeing great growth. The tablet market is growing 52%, faster than the PC market ever did. There is also incredible growth opportunities, as there are only 439 million tablet users versus 743 million desktop PCs, 5.2 billion mobile phones and 5.5 billion TVs.

Mobile becomes an increasingly dominant form of web usage. 25 percent of all web usage is through a mobile device, an increase from 14 percent just a year ago.

US operating systems dominate mobile phones worldwide. US smartphone operating systems (iOS, Android and Windows) has risen from 5 percent to 97 percent in eight years.

Mobile ad spend still has tremendous upside. Based on time spent in the media versus percent of advertising in the media, advertisers are focused way too much on print, thus showing that they will likely migrate more of their advertising to mobile since that is where there customers are spending their time.

Cyber threats are intensifying. Threats have grown 400% since 2011 and now nation states are key instigators. More mobile attacks are also expected.

Tech venture financing is still depressed. Overall venture financing for tech companies is 77% below its 2000 peak and in the United States 50 percent of its peak.

Education may be at an inflection point. Technology now offers many potential solutions for issues affecting education, particularly because of its ability to lower costs and provide personalized instruction.

Healthcare is another sector that may be at an inflection point. Just as with education, technology can help keep costs under control while machine learning can provide better diagnosis.

Messaging is an exciting space. In less than five years, there are 1 billion users of messaging apps. This includes WhatsApp with 400 million MAU (monthly active users), WeChat with 355 million MAU, Line with 280 million MAU and Viber with 100 million MAU (not to mention SnapChat with 1.2 billion messages/day and KakaoTalk with 5.2 billion messages/day). Meeker believes that the edges created in messaging apps (connections between players) can become more valuable than Facebook’s social graph.

The dominance of apps is resulting in unbundling of the Internet. Rather than a single destination, users are finding different apps for each specific function.

Apps are re-imagining activities and businesses. Tinder is replacing bars and nightclubs for people to “meet.” Airbnb is re-imagining how people find a room when on a trip. Grubhub is re-imagining how people order take-out food. Amazon Fresh is re-imagining grocery shopping. Uber is re-imagining how people get a taxi. In the years to come, almost any business may be re-imagined.

Biggest re-imagining will be people with mobile devices and sensors uploading troves of findable and shareable data. Mining the rising volume of data has potential to yield patterns that help solve basic and previously unsolvable problems but could create challenges tied to individual rights.

Sensor use rising rapidly. The use of sensors, such as fingerprint identification, cameras, headsets presents new opportunities and applications.

Computing costs dropping dramatically. Cloud based computing has led to a 33% annual decline in computing costs over the past ten years, bandwidth costs decreasing 27% annually and a 38% decrease per year in storage costs.

Compelling user interfaces are part of why many business are being re-imagined The UI for Yelp is much more attractive than the UI for a telephone book. The UX (user experience) for getting a taxi with Uber is much easier than hailing and paying for a taxi the traditional way. Amazon Fire TV is a much simpler experience than having multiple remotes for different functions. Overall, using technology to make a simpler or easier experience is a driving force in the re-imagining of many industries.

Data mining and analytic tools that mine and organize data are growing rapidly. There is exploding demand for tools that help people, from Jawbone helping people sleep to Netflix media personalization to AppDynamics’ app performance monitoring.

Apps are replacing television channels. People are increasingly consuming television programming with on demand apps. This is also leading to a proliferation of new television channels, rather than traditional networks specialized channels in apps such as YouTube.

Social television boosts the impact of ads. When TV ads are combined with Twitter, impact grows significantly.

While the points above were what I considered most relevant from Meeker’s presentation, the full presentation is here:

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Author: Lloyd Melnick

I am GM of Chumba at VGW, where I lead the Chumba Casino team. Previously, I was Director of StarsPlay, the social gaming vertical for the Stars Group. I was also Sr Dir at Zynga's social casino (including Hit It Rich! slots, Zynga Poker and our mobile games), where I led VIP CRM efforts and arranged licensing deals. I have been a central part of the senior management team (CCO, GM and CGO) at three exits (Merscom/Playdom, Playdom/Disney and Spooky Cool/Zynga) worth over $700 million.
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Lloyd Melnick

This is Lloyd Melnick’s personal blog. I am EVP Casino at VGW, where I lead the Chumba Casino team. I am a serial builder of businesses (senior leadership on three exits worth over $700 million), successful in big (Disney, Stars Group, Zynga) and small companies (Merscom, Spooky Cool Labs) with over 20 years experience in the gaming and casino space.